Joining the ranks of Yahoo, Ask Jeeves, UK Lycos and others, Microsoft's Hotmail is increasing storage space for both paying and non-paying customers in answer to Google's GMail.

As of July, non-paying customers will get 250MB (instead of 2MB) of storage space and paying customers will get two gigabytes.

The new service, which will be named "Hotmail Plus", will cost $19.95 per year.

It is thought that 500,000 pages of messages can be kept on one gigabyte of hard drive space.

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